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Which Type of IRA is Right for You?

summit financial advisors blog

A message from the Summit Financial Advisor Program

There are two main types of IRAs – traditional IRAs and Roth IRAs – and both offer tax advantages.

Most people saving for retirement can contribute to a traditional IRA, and if you meet certain requirements your contributions are tax deductible. Whether your contributions are deductible or not, your earnings accumulate tax deferred, so you won’t owe income taxes until you make withdrawals. Deductible contributions and earnings are taxed at your regular income tax rate as you withdraw them.

With a Roth IRA, however, contributions aren’t tax deductible when you make them. But in favorable contrast to a traditional IRA, earnings are free from income tax upon withdrawal if you meet the specified conditions. A Roth IRA also has more flexible early withdrawal rules than a traditional IRA, and you aren’t required to begin withdrawals at age 70½.

Determining which type of IRA account is right for you depends on several factors including:

  • Your age at the time you’re contributing
  • Your tax rates when contributing and during retirement
  • Your plans for needing this money prior to age 59½
  • Your plans for leaving this money to heirs, and
  • Your likelihood of actually setting aside the money you save in taxes and investing it in another account for retirement.

For more information about IRA eligibility rules and help determining which IRA is best for you, contact Summit Financial Advisors at 800-236-5560, Ext. 4012 or

Representatives are registered, securities are sold and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. IRA-11146131-0215-0317